business news in context, analysis with attitude

On the subject of lion meat for human consumption, and my joke about eating reindeer meat and telling my (then little) kids that I found a little red bulb at the bottom of the plate, one MNB user wrote:

Too funny!  Many years ago I had dinner in one of the Colonial Restaurants in Williamsburg VA.  One of the items on the menu was game pie, consisting of rabbit, venison, and duck.  As much as I wanted to, I just couldn’t get past the fact that I would be eating Bambi, Thumper, and Donald!!

I'd order that in a second.

On the subject of a piece we posted yesterday about staffing issues that Amazon has been experiencing in one distribution center, one MNB user wrote:

If the Temp Agency only worked for Amazon that would be one thing, but the excerpt does not mention that.  In most cases the "employees" work for the temp agency.  The temp agency just bills Amazon.  The temp agency would be responsible to pay all the payroll taxes including the unemployment share.  Since the temp agency pays payroll they have the standing to dispute the unemployment claims---not Amazon.

It seems the article is making assumptions or conclusions that the excerpt does seem to support.

Suppose and employee was terminated for theft.  The employee could still file for unemployment.  The employer would normally contest the claim---as they should and are entitled to do.  Assuming the employer had sufficient evidence the claim would be closed without compensation.

The statistic that is missing is how many wins or loses did the temp agency have in the period looked at?  It could be that Amazon used 75% of the temp agency's resources but the temps they actually used were involved in say only 15% of the claims and some lesser percentage of awards.  It would be very difficult to conclude that Amazon is a poor employer.

The excerpt was just an excerpt.

You can read the entire story here.

For the record, I was not accusing Amazon as being a poor employer. I was more interested in the piece in the context of some suggestions that Walmart gets unfairly targeted because of its size. The focus on Amazon will be ever greater as it grows, and the company needs to realize that. It also may not matter which entity is the actual employer ... at least not in terms of public opinion.

MNB user Rick Chubb wrote:

There is no doubt that Amazon is using Integrity Staffing to reduce its unemployment insurance burden; however, in fairness to Amazon, it should be recognized that Amazon is not doing anything that is currently “illegal”, and I am quite sure that Integrity does pay Federal and PA unemployment to its “ex” workers, whether they worked for Amazon or XYZ Corporation.  Both the Feds and the State of PA would haul them into court if former employees who are due unemployment insurance payments were not paid their earned unemployment compensation.
That Integrity Staffing “fights” (bad word choice, btw) their obviously “large” volume of unemployment claims is not “unusual” – especially not for a temporary staffing agency.  If they are “fighting” them, it most likely means that they think an employee was rightfully and properly discharged, and is therefore not due unemployment compensation that would be charged to their hourly unemployment insurance “rate”.  If Integrity “wins” an unemployment hearing, it does not necessarily mean that the employee will absolutely not be able to collect unemployment, but it does mean that Integrity’s “account” with the State will not get “charged”, and their “rate” will then not be negatively impacted.
We have used temporary staffing agencies to help us find and hire unskilled factory/warehouse workers for our two manufacturing plants (insulating glass plant and refrigerator door plant).  We have used temp agencies to find employees that we subsequently hire on a temp-to-perm basis, wherein we use the temp agency as a “recruiter”, and as an “OJT agent”, where we have the ability to “try out” the employee for up to 600 or 700 hours (whatever their particular hiring-with-no-fee agreement says), before we hire them.
Unfortunately, our experience has been that hourly workers that are hired from a temp agency are usually not “high-quality” workers.  They tend to be working for a temporary staffing agency “for a reason”.  And this means that turnover among these type of workers is necessarily high.  And this means that an outfit like Integrity Staffing spends a huge amount of time “recruiting” and “placing” and “turning over” their hourly workers, all in an effort to find those “diamonds in the rough”, that ultimately end up being hired as permanent workers at an outfit like Amazon.  Integrity is essentially a “body shop” for “warm bodies”, more often than not – especially at a highly-seasonal outfit like Amazon.  Thus, Integrity spends a huge amount of time managing unemployment claims, and they certainly have a vested interest in defending against the payment of up to 99 weeks of unemployment benefits (I believe this is the current Federally-mandated maximum that is paid out on a State-by-State basis, if my memory serves me) for an hourly worker that is not worth their salt.
Amazon is probably making a “wise decision” if they use a large quantity of temporary workers for order fulfillment jobs on a seasonal basis.  For their “level” and/or “permanent staffing” requirements, Amazon has a vested interest in hiring and retaining “A” players – defined by Jim Collins as “people you would enthusiastically rehire if given the opportunity”.  We use this definition in our hiring process, and we are constantly seeking “A” players to build our team – in both management and the hourly ranks.
Amazon probably views Integrity Staffing as their “go to supplier” for “B”, “C” and “D” players, and they probably have a separate hiring process for trying to find the “A” players that I am sure they want as long-term, full-benefit-type, permanent employees.
Hope this helps give you an employer’s perspective – from someone who is directly involved in hiring strategy, etc.

It does. Thanks. 
KC's View: